Appendix 2: Explanatory information (SI
2006/605)
Ministry of Defence note on the Competition Act
1998 (Public Policy Exclusion) Order 2006 (SI 2006/605)
Question: What responses
were received to consultation in relation to the Order - in particular,
did those consulted support or oppose what is proposed?
Response
During Stage 1 of the Surface Ship Support study
(commenced Aug 2004) the options were developed with the current
providers of fleet time and upkeep support, Babcock Support Services
Ltd (BSSL), Devonport Management Ltd (DML) and Fleet Support Ltd
(FSL), together with BAE SYSTEMS and the A&P Group; these
two latter companies having expressed an interest in the work
going forward. Individual meetings took place with senior officials
of the companies to explore their thinking on the future delivery
of warship support. At the end of Stage 1 (Dec 2005) the options
deemed most able by MOD to meet the requirement were taken forward
and further developed with those industry parties most knowledgeable
in the field of surface warship support, i.e. BIG, DML and FSL.
The other 2 companies were not engaged in this further work as
more substantive concerns were emerging regarding the sustainability
of competitive upkeep policy. In the light of over capacity within
existing providers it would be unlikely that we would be seeking
new entrants to the market.
The MOD's Ministerial approval process, on the basis
of the preferred option, could not conclude until the Secretary
of State for Trade and Industry had given his approval in principle
for an Exclusion Order to the Competition Act 1998 to be made.
Once determined, consultation took place with the three companies
to confirm that they were willing to proceed on the basis of an
alliancing approach. Following this confirmation, a final submission
was made to S of S for Trade and Industry, through S of S for
Defence, to make the Order. Discussions took place on the preferred
option with senior officials at both BAE SYSTEMS and A&P Group
shortly before the public announcement of the alliancing approach,
by written statement, by S of S for Defence on 14 February 2006.
BAE SYSTEMS has not provided any formal comment and we are not
aware of any concerns. A&P has provided comments to the MOD
since the announcement and these have been addressed.
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